All Forum Posts by: Joe Funari

@Catrina Linhard All too often my clients try to self manage from a far. This is extremely challenging especially if you have not lived in that market and/or built a good network of  contractors. Thus, the most practical alternative is selecting a competent property management. 

I want to discourage others to post to this’s thread pros and cons of utilizing a property management. But rather valuable lessons they have learned from their experiences utilizing a PM. One valuable piece of advice is scrutinize your monthly statements for accuracy. There is a lot of moving parts to a PM. I know I have worked for one in the trenches. I have yet to find one that was 100% accurate in its record keeping. It’s mostly genuine human error. But it is your responsibility to audit their statements and question any errors. I always advice treating your real estate investing as a business and not a hobby.

@Nikhil Garg wait until that HVAC goes out to replace. You stated you were tight on cash. I had a similar situation where the HVAC was old on one of my rental properties and I was told it would have to be replaced in two years. It lasted three years. So you never know how long it will last.

@Bhaskar Upadhyayula Review your lease agreement with this high maintenance tenant. It will state when notice must be given of non-renewal of their lease. If no date is stated then give them written notice of non renewal at least 60 days prior to lease expiring. Another BP member suggested that a good follow-up to this written notice is about 30 days prior to their current lease sending them a checklist of things they need to do to prepare for the move and ensure they get their deposit back. All to often I see where tenants take advantage of landlords. You have one here and time to let them go find another place to live. Demand is too high here in Texas for rentals anyway.

@Brandi Graham when I first started in REI it was tempting to take those classes as well. Until I met a couple at one of the "intro free" classes where they put a hard sell on you to convince you to pay all that money for an REI education. I had asked this couple if they enjoyed the classes? They said very much so. I asked how much have you spent on classes? They said $75K. I said wow you must have many rentals by now? Their reply, not yet. I was beside myself. Long story short, don't over analyze or spend too much on REI education. Join a local REI club. Network there with fellow investors. Also work with a Realtor that is a fellow investor who can help recommend those professionals to add to your team. You time, and money is better spent on closing deals ASAP.

@Curtis Curley you never know where you will meet those that help you on your REI journey. I met my mentor at a father-son book fair at school. A mutual friend introduced us because he knew we both are involved in REI. Today that same person and I are involved in many deals together and talk or text daily.

@Mike Sola find a true community bank. They will definitely lend to your company. You can also find lenders where you can do Fannie May 30 year notes in personal name and transfer to LLC at closing without triggering the due on sale clause in most traditional banks. But your limited to the first 10 and your primary residence counts as one if mortgaged.

@Mike Sola Apologies REI = Real Estate Investment company is what I was referring to. To many investors treat REI as a hobby and not a business. You should set up an LLC or S Corp. Both are taxed the same by the IRS. But there are some nuances about setting up an LLC that makes it more attractive to investors. But the tax savings of setting up a company far outweigh purchasing a property in your personal name. Its all about deductions for business expenses. There are CPA's and companies in every state that help set up your LLC. The costs are far better utilizing their services versus doing it yourself. But again this is my personal opinion on the matter.

@Yolanda Brown regarding the repairs I would recommend you have the PM quote the “make ready” for a rental. My experience with PM’s doing the make ready can do it for less here in the Dallas/Ft. Worth area. Also they don’t go crazy on putting in upgrades like granite if the neighborhood doesn’t warrant it. Remember you won’t ever live in the place. So cost effective repairs make the most sense. Also, if any issues with the repairs after a tenant moves in you can get the PM to address them at no cost to you. Just make sure you get a detailed quote for the make ready.

@Luther A. are you including in your search townhomes, half duplex’s, and condos? I have a fixer upper listing townhome in Dallas In the mid $50k rand. So if your doing your search right it will show up. If not I am glad to help you in your search. 

@Matthew Ryckman I GC my own flips. But general contracting and focusing on building you Realtor business will take several years. Especially the Realtor side most people fail and give it up after two years. Not to discourage you. But being a Realtor is not easy or glamorous work. By the way I like buying wholesale deals in the Dallas/ Ft. Worth area.